================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

            [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended OCTOBER 2, 2004

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                THE SECURITIES EXCHANGE ACT OF 1934

                    For the transition period from ----to----

                          COMMISSION FILE NUMBER 001-01361

                          Tootsie Roll Industries, Inc.
             (Exact Name of Registrant as Specified in its Charter)

        VIRGINIA                                          22-1318955
        --------                                          ----------
(State of Incorporation)                    (I.R.S. Employer Identification No.)

7401 South Cicero Avenue, Chicago, Illinois                  60629
-------------------------------------------                  -----
 (Address of Principal Executive Offices)                  (Zip Code)

                                  773-838-3400
                                  ------------
              (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                             Yes  X         No ___
                                 ---

Indicate by check mark whether the Registrant is an accelerated filer (as
Defined in Rule 12b-2 of the Exchange Act)

                             Yes  X         No ___
                                ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date (October 2, 2004)

Class                                             Outstanding (In Thousands)
-----                                             --------------------------

Common Stock, $.69 4/9 par value                  34,679,676
Class B Common Stock, $.69 4/9 par value          17,595,273

================================================================================

<PAGE>

                 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES



                                 OCTOBER 2, 2004



                                      INDEX

                                                                 Page No.
Part I -   Financial Information

  Item 1.   Financial Statements:

            Condensed Consolidated Statements of
             Financial Position                                    2

            Condensed Consolidated Statements of Earnings,
             Comprehensive Earnings and Retained Earnings          3

            Condensed Consolidated Statements of Cash Flows        4

            Notes to Condensed Consolidated Financial Statements   5-5E


  Item 2.   Management's Discussion and Analysis of Financial
             Condition and Results of Operations                   6

  Item 3.   Quantitative and Qualitative Disclosures About
             Market Risk                                           6D

  Item 4.   Controls and Procedures                                6E

Part II -   Other Information

  Item 2.   Unregistered Sales of Equity Securities and
             Use of Proceeds                                       7

  Item 6.   Exhibits and Reports on Form 8-K                       7

  Signatures                                                       7

  Certifications

<PAGE>

                                PART 1 - FINANCIAL INFORMATION
                                 ITEM 1. FINANCIAL STATEMENTS
<TABLE>
                        TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED
                             CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                               (in thousands of dollars)       (UNAUDITED)

<CAPTION>
ASSETS                                                 Oct. 2,        Sep. 27,         Dec. 31,
 CURRENT ASSETS                                          2004            2003            2003
 --------------                                     -----------     ------------      -----------

  <S>                                                  <C>          <C>                  <C>
  Cash & cash equivalents                              $ 29,807     $     46,845         $ 84,084
  Investments                                            30,399           92,465           86,961
  Trade accounts receivable,
   Less allowances of $3,334, $3,258 & $1,970            90,895           83,137           18,131
  Other receivables                                       6,924            2,849            3,076
  Inventories, at cost
   Finished goods & work in process                      40,633           30,194           28,969
   Raw material & supplies                               22,179           16,522           17,117
  Prepaid expenses                                        6,367            5,446            4,416
  Deferred income taxes                                     951            4,481              951
                                                        -------          -------          -------

   Total current assets                                 228,155          281,939          243,705
                                                        -------          -------          -------

 PROPERTY, PLANT & EQUIPMENT
 ---------------------------
 (at cost)
  Land                                                   14,968            8,277            8,265
  Buildings                                              60,718           44,001           44,960
  Machinery & equipment                                 238,313          205,159          206,697
                                                        -------          -------          -------
                                                        313,999          257,437          259,922
 Less-accumulated depreciation                          139,059          128,264          130,759
                                                        -------          -------          -------
 Net property, plant and equipment                      174,940          129,173          129,163
                                                        -------          -------          -------

 OTHER ASSETS
 ------------

  Goodwill                                               75,297           38,151           38,151
  Trademarks                                            191,747           79,348           79,348
  Investments                                           106,761          104,591          112,431
  Split dollar officer life insurance and other assets   76,062           57,774           62,499
                                                        -------          -------          -------
                                                        449,867          279,864          292,429
                                                        -------          -------          -------

   Total assets                                        $852,962         $690,976         $665,297
                                                        =======          =======          =======

(The accompanying notes are an integral part of these statements)

</TABLE>

                                       -2-

<PAGE>

<TABLE>
<CAPTION>
                  (in thousands except per share data)      (UNAUDITED)


LIABILITIES AND SHAREHOLDERS' EQUITY                   Oct. 2,        Sep. 27,         Dec. 31,
 CURRENT LIABILITIES                                     2004            2003            2003
 -------------------                                -----------     ------------      -----------

  <S>                                                  <C>              <C>              <C>
  Notes payable                                        $ 17,000         $      -         $      -
  Accounts payable                                       23,994           16,037           11,947
  Dividends payable                                       3,659            3,613            3,589
  Accrued liabilities                                    52,981           46,160           38,834
  Income taxes payable                                   22,112           27,717            8,517
                                                        -------          -------          -------
    Total current liabilities                           119,746           93,527           62,887
                                                        -------          -------          -------

 NON-CURRENT LIABILITIES
 -----------------------

  Notes payable                                         105,000                -                -
  Industrial development bonds                            7,500            7,500            7,500
  Postretirement health care and life
    insurance benefits                                    9,852            8,690            9,302
  Deferred compensation and other liabilities            28,076           24,284           26,396
  Deferred income taxes                                  23,034           19,633           22,631
                                                        -------          -------          -------
    Total non-current liabilities                       173,462           60,107           65,829
                                                        -------          -------          -------
    Total liabilities                                   293,208          153,634          128,716
                                                        -------          -------          -------

 SHAREHOLDERS' EQUITY

 Common stock, $.69-4/9 par value-
  120,000 shares authorized; 34,680, 34,421 & 34,082
  respectively, issued                                   24,083           23,903           23,668
 Class B common stock, $.69-4/9 par value-
  40,000 shares authorized; 17,595, 17,153 & 17,145
  respectively, issued                                   12,219           11,912           11,906
 Capital in excess of par value                         397,745          369,446          357,922
 Retained earnings                                      138,833          145,527          156,786
 Accumulated other comprehensive earnings (loss)        (11,134)         (11,454)         (11,709)
 Treasury stock (at cost)-
  58, 58 & 58 shares respectively                        (1,992)          (1,992)          (1,992)
                                                        -------          -------            -----
   Total shareholders' equity                           559,754          537,342          536,581
                                                        -------          -------          -------
   Total liabilities and
     Shareholders' equity                              $852,962         $690,976         $665,297
                                                        =======          =======          =======

(The accompanying notes are an integral part of these statements.)

</TABLE>

                                      -2A-

<PAGE>

<TABLE>
                           TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
                                CONDENSED CONSOLIDATED STATEMENTS OF
                        EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS
                        ------------------------------------------------------
                       (in thousands except per share amounts)      (UNAUDITED)
<CAPTION>
                                                                  13 Weeks Ended
                                                      Oct 2, 2004    &    Sept 27,2003
                                                      --------------------------------

<S>                                                    <C>                  <C>
Net sales                                              $156,971             $147,201
Cost of goods sold                                       92,167               85,269
                                                        -------              -------

  Gross margin                                           64,804               61,932
                                                        -------               ------

Selling, marketing and administrative expense            25,123               22,568

  Earnings from operations                               39,681               39,364
Other income, net                                         1,007                1,337
                                                        -------              -------

  Earnings before income taxes                           40,688               40,701
Provision for income taxes                               13,712               13,756
                                                        -------              -------
Net earnings                                             26,976               26,945
                                                        -------              -------

Other comprehensive income, before tax:

Foreign currency translation adjustments                    283                 (545)

Unrealized gains on securities                               95                  113

Unrealized gains (losses) on derivatives                    283                 (497)
                                                        -------              -------

Other comprehensive income (loss) before tax                661                 (929)

Income tax (expense) benefit related to items of other
  comprehensive income                                     (141)                 142
                                                        -------               ------

Other comprehensive income (loss), net of tax               520                 (787)
                                                        -------               ------

Comprehensive earnings                                 $ 27,496             $ 26,158
                                                        =======              =======

Retained earnings at beginning of period               $115,512             $122,191
  Net earnings                                           26,976               26,945
  Cash dividends                                         (3,655)              (3,609)
                                                        -------              -------

Retained earnings at end of period                     $138,833             $145,527
                                                        =======              =======

   Net earnings per share (note 2)                         $.52                 $.51
   Dividends per share *                                   $.07                 $.07

Average number of shares outstanding                     52,217               53,183

*Does not include 3% stock dividend to shareholders of record on 3/02/04 and 3/04/03.

(The accompanying notes are an integral part of the statements)

</TABLE>

                                       -3-

<PAGE>

<TABLE>
                           TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
                               CONDENSED CONSOLIDATED STATEMENTS OF
                        EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS
                        ------------------------------------------------------
                       (in thousands except per share amounts)      (UNAUDITED)
<CAPTION>
                                                                  39 Weeks Ended
                                                      Oct 2, 2004    &    Sept 27,2003
                                                      --------------------------------

<S>                                                    <C>                  <C>
Net sales                                              $314,174             $300,496
Cost of goods sold                                      179,648              170,422
                                                        -------              -------

  Gross margin                                          134,526              130,074
                                                        -------              -------

Selling, marketing and administrative expense            61,966               58,463

  Earnings from operations                               72,560               71,611
Other income, net                                         3,303                4,176
                                                        -------              -------

  Earnings before income taxes                           75,863               75,787
Provision for income taxes                               25,566               25,616
                                                        -------              -------
Net earnings                                             50,297               50,171
                                                        -------              -------

Other comprehensive income, before tax:

Foreign currency translation adjustments                   (110)                (366)

Unrealized (losses) gains on securities                    (176)                 388

Unrealized gains (losses) on derivatives                  1,262                 (445)
                                                        -------              -------

Other comprehensive income (loss) before tax                976                 (423)

Income tax (expense) benefit related to items of other
  comprehensive income                                     (401)                  21
                                                        -------               ------

Other comprehensive income (loss), net of tax               575                 (402)
                                                        -------               ------

Comprehensive earnings                                 $ 50,872             $ 49,769
                                                        =======              =======

Retained earnings at beginning of period               $156,786             $148,705
  Net earnings                                           50,297               50,171
  Cash dividends                                        (10,891)             (10,778)
  Stock dividends - 3%                                  (57,359)             (42,571)
                                                         ------               ------

Retained earnings at end of period                     $138,833             $145,527
                                                        =======              =======

   Net earnings per share (note 2)                         $.96                 $.94
   Dividends per share *                                   $.21                 $.21

Average number of shares outstanding                     52,410               53,460

*Does not include 3% stock dividend to shareholders of record on 3/02/04 and 3/04/03.

(The accompanying notes are an integral part of the statements)

</TABLE>

                                      -3A-

<PAGE>

<TABLE>
                         TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
                         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                         -----------------------------------------------
                         (in thousands of dollars)           (UNAUDITED)
<CAPTION>
                                                           39 WEEKS ENDED
                                                    Oct 2, 2004   &   Sept 27, 2003
                                                    -------------------------------
<S>                                                   <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
------------------------------------

Net earnings                                          $ 50,297            $ 50,171
Adjustments to reconcile net earnings to
 net cash provided by operating
 activities:
  Depreciation and amortization                          8,325               8,753
  Amortization of marketable securities                  1,885               1,886
  Purchase of trading securities                        (2,113)             (2,591)
  (Increase) decrease in assets:
   Accounts receivable                                 (61,476)            (60,540)
   Other receivables                                     2,089                 943
   Inventories                                          (7,245)             (3,181)
   Prepaid expenses and other assets                    (5,453)             (1,153)

  Increase (decrease) in liabilities:
   Accounts payable and accrued liabilities             15,544              13,946
   Income taxes payable and deferred                    13,997              16,510
   Postretirement health care and life
    insurance benefits                                     550                 540
   Deferred compensation and other liabilities           1,745               1,933
   Other                                                   (30)                (16)
                                                        ------             -------

Net cash provided by operating activities               18,115              27,201
                                                        ------             -------

CASH FLOWS FROM INVESTING ACTIVITIES:
------------------------------------

  Acquisition of business, net of cash acquired       (218,229)                  -
  Capital expenditures                                 (10,825)             (9,272)
  Purchase of held to maturity securities              (22,049)            (47,091)
  Maturity of held to maturity securities               67,657              19,401
  Purchase of available for sale securities            (81,699)            (41,359)
  Sale and maturity of available for
   sales securities                                     98,382              31,593
                                                       -------             -------

Net cash used in investing activities                 (166,763)            (46,728)
                                                       -------              ------

CASH FLOWS FROM FINANCING ACTIVITIES:
------------------------------------

  Proceeds from issuance of bank loans                 154,000                   -
  Repayment of bank loans                              (32,000)                  -
  Shares repurchased and retired                       (16,407)            (28,332)
  Dividends paid in cash                               (11,222)            (10,803)
                                                        ------              ------

Net cash provided by (used in) financing activities     94,371             (39,135)
                                                        ------              ------

Decrease in cash and cash equivalents                  (54,277)            (58,662)
Cash and cash equivalents-beginning of year             84,084             105,507
                                                       -------             -------

Cash and cash equivalents end of quarter              $ 29,807            $ 46,845
                                                       -------             -------
Supplemental cash flow information:

  Income taxes paid                                   $ 12,402            $ 11,321
                                                       -------             -------
  Interest paid                                       $    351            $    140
                                                       -------             -------
  Stock dividend issued                               $ 56,959            $ 42,513
                                                       =======             =======

(The accompanying notes are an integral part of the statements)

</TABLE>

                                       -4-

<PAGE>

                 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  OCT. 2, 2004
               (in thousands except per share amounts) (UNAUDITED)



Note 1 - Foregoing data has been prepared from the unaudited financial records
         of the Company and in the opinion of management all adjustments
         necessary for a fair statement of the results for the interim period
         have been reflected. All adjustments were of a normal and recurring
         nature. Certain reclassifications have been made to the prior year
         financial statements to conform to the current year presentation. These
         consolidated financial statements should be read in conjunction with
         the consolidated financial statements and the related notes included in
         the Company's 2003 Annual Report on Form 10-K.



Note 2 - Average shares outstanding for the period from January 1, 2004 to Oct.
         2, 2004 reflects stock repurchases of 474 shares for $16,407 and a 3%
         stock dividend distributed on April 14, 2004. Average shares
         outstanding for the period from January 1, 2003 to September 27, 2003
         reflects stock repurchases of 952 shares for $28,332 and a 3% stock
         dividend distributed on April 16, 2003.



Note 3 - Results of operations for the 13 and 39 week periods ended October 2,
         2004 are not necessarily indicative of results to be expected for the
         year to end December 31, 2004 because of the seasonal nature of the
         Company's operations. Historically, the Third Quarter has been the
         Company's largest sales quarter due to Halloween sales.



Note 4 - The Company's quarterly financial reporting is based on 13 week periods
         ending on the last Saturday of each period while its annual reporting
         is based on the twelve months ending December 31st of the calendar
         year. This quarterly reporting requires that the Company periodically
         reset its quarter-end dates to maintain 13-week quarterly reporting
         periods during its calendar year. As a result, the third quarter 2004
         and 2003 periods ended on October 2, 2004 and September 27, 2003,
         respectively. If third quarter 2004 had ended on September 27, 2004
         instead of October 2, 2004, the Company estimates that nine months 2004
         net sales would have been approximately $4,900 less than the reported
         2004 sales amount.

                                       -5-

<PAGE>

Note 5 - In January 2004, the FASB issued Staff Position No. FAS 106-2
         "Accounting and Disclosure Requirements Related to the Medicare
         Prescription Drug, Improvement and Modernization Act of 2003" (the
         "Act"). The Company has elected to adopt accounting for the Act
         effective as of the beginning of the third quarter of 2004.
         Accordingly, the Company's accumulated postretirement benefit
         obligation and net postretirement health care costs included in the
         consolidated financial statements reflect the effects of the Act. The
         effect of adoption of the Act were not significant to the Company's
         financial statements.



Note 6 - ACQUISTION
         On August 30, 2004, Tootsie Roll Industries, Inc. (Tootsie Roll)
         purchased certain assets and assumed certain liabilities of Concord
         Confections Inc. and its affiliates (collectively CCI) which comprise
         (i) Concord Confections Inc., the previous principal manufacturing and
         operating company, (ii) Terra Rouge Estates Inc., the previous owners
         of the land and real estate, (iii) Alpharetta Confections, Inc, the
         previous US sales and distribution company, and (iv) the 50% equity
         interest in the shares of Fleer Espanola, S.A. and Dr. Torrents, S.A.,
         a Spanish operation. The adjusted purchase price was $214,088, and
         financed with the liquidation of $64,229 of marketable securities and a
         bank term loan for $154,000. The results of CCI's operations have been
         included in the condensed consolidated financial statements since the
         date of acquisition. CCI holds a strong market position in the bubble
         gum category and its products are sold primarily under the Dubble
         Bubble brand name and trademark. The addition of CCI reinforces the
         Company's commitment to offer well-known consumer brands that
         contribute to the success of the Company.

                                       -5A-

<PAGE>

         Under the purchase method of accounting, the total adjusted estimated
         purchase price as shown in the table below has been allocated to CCI's
         tangible and intangible assets and liabilities based on their estimated
         fair values as of August 30, 2004, the purchase date. The valuation of
         a significant portion of assets and liabilities is still being
         determined and accordingly the allocation below is preliminary. The
         adjusted purchase price was preliminarily allocated as follows (in
         thousands of U.S.$):



   Preliminary calculation of adjusted purchase price:
   Cash consideration paid for net assets acquired          $218,229
   Estimated direct transactions fees and expenses,
         and contractual severance                             1,000
   Less-Adjustment to purchase relating to minimum
         working capital                                      (5,141)
                                                              -------
   Total adjusted purchase price                            $214,088
                                                            ========
   Preliminary allocation of adjusted purchase price:
   Net working capital based on historical book values     $   9,606
   Step up of inventories                                      1,622
   Investment in joint venture                                10,000
   Property, plant and equipment                              41,298
   Other assets                                                2,017
   Indefinite trademarks                                     112,400
   Goodwill-deductible                                        37,145
                                                              ------
   Total adjusted purchase price                            $214,088
                                                            ========



         The following unaudited pro forma condensed combined statements of
         earnings are presented as if the transaction had been completed on
         January 1, 2003. The following unaudited pro forma financial
         information gives effect to (i) the transaction as a purchase of CCI by
         Tootsie Roll using the purchase method of accounting, (ii) the
         assumptions and adjustments described in the accompanying notes to the
         unaudited pro forma condensed combined financial information, (iii) the
         incurrence by Tootsie Roll of a $154,000 bank term loan and the
         liquidation by Tootsie Roll of $64,229 of marketable securities and
         cash equivalents, and (iv) translation of CCI's historical financial
         statements from Canadian dollars to US dollars. The average US$/C$
         exchange rates used to convert information was $0.71 for the year ended
         December 31, 2003 and $0.75 for the six months ended July 3, 2004.

                                       -5B-

<PAGE>

         Pro forma adjustments are necessary to reflect the purchase price and
         to adjust CCI's net tangible and intangible assets and liabilities to
         estimated fair values. Pro forma adjustments are also necessary to
         reflect costs and expenses of financing the purchase, including
         additional interest expense relating to Tootsie Roll's bank borrowings
         and decrease in Tootsie Roll's investment income reflecting the sale of
         marketable securities, changes in depreciation expense resulting from
         fair value adjustments to net tangible assets, the new capital
         structure of CCI as a wholly-owned subsidiary of Tootsie Roll, and the
         income tax effects related to the pro forma adjustments. Certain
         reclassifications have been made to conform the CCI historical
         financial information to the pro forma presentation.

         Historical financial results of CCI were prepared using the Canadian
         dollar as the functional currency. Tootsie Roll has determined that
         they will consider the functional currency of CCI to be the US dollar
         subsequent to the date of acquisition as substantially all of the sales
         and financing as well as a portion of operating expenses are
         denominated in US dollars. The CCI financial information was prepared
         for the six months ended June 27, 2004 compared to the historical
         Tootsie Roll financial information that was prepared for the six months
         ended July 3, 2004.

         The allocation of purchase price is preliminary and is based on
         management's current estimates of the fair value of the assets acquired
         and liabilities to be assumed. Preliminary valuations have been
         considered in management's estimates of the fair values reflected in
         the unaudited pro forma condensed combined financial information. The
         final purchase price allocation will be completed after asset and
         liability valuations are finalized. In addition, the final purchase
         price could be affected by differences between the determination of the
         required minimum working capital amount that was to be provided under
         the terms of the CCI purchase contract. Final adjustments may change
         the allocation of the purchase price, which could affect the fair value
         assigned to the assets, including amounts preliminarily allocated to
         intangible assets with indefinite lives and goodwill, and reported
         liabilities.

         The unaudited pro forma condensed combined financial information does
         not reflect any cost savings or synergies that might be realized,
         including the anticipated elimination of substantially all of the CCI
         historical costs and expenses of senior executive compensation and
         other management expenses which aggregated approximately $12,300 and
         $2,800 for the year ended December 31, 2003 and six months ended July
         3, 2004, respectively.

                                       -5C-

<PAGE>

             UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT
                             OF TOOTSIE ROLL AND CCI
                      FOR THE SIX MONTHS ENDED July 3, 2004
                (in thousands of U.S.$ except per share amounts)

                                                Combined
                                                Pro Forma
                                                ---------

Net sales                                      $ 196,448

Cost of sales                                    113,708
Selling, marketing & administration expenses      47,853
Foreign exchange (losses)                          ( 222)
Interest expense                                  (1,712)
Investment and other income                        2,320
                                                   -----

Earnings before income taxes                      35,273
Provision for income taxes                        11,923
                                                  ------

Net income                                     $  23,350
                                                  ======

Earning per share                              $    0.44
                                                    ====



             UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT
                             OF TOOTSIE ROLL AND CCI
                      FOR THE YEAR ENDED December 31, 2003
                (in thousands of U.S.$ except per share amounts)

                                                Combined
                                                Pro Forma
                                                ---------

Net sales                                       $ 467,009

Cost of sales                                     270,684
Selling, marketing & administration expenses      106,663
Foreign exchange  gains                            17,401 (a)
Interest expense                                   (3,252)
Investment and other income                         4,947
                                                    -----

Earnings before income taxes                      108,758
Provision for income taxes                         36,786
                                                   ------

Net income                                     $   71,972
                                                   ======

Earning per share                              $     1.39
                                                     ====


(a) The pro forma statement of earnings reflects $17,401 of foreign exchange
gains for the year ended December 31, 2003. These gains principally comprise the
net change in the market value of forward foreign exchange contracts outstanding
as of the beginning and end of the indicated periods ($10,159), early settlement
of outstanding hedges ($2,708), and net settlement of derivatives on their
maturity dates ($4,534).

                                      -5D-

<PAGE>

Note 7 - During the third quarter of 2004, the Company acquired the Concord
         Confections business (see Note 6). Approximately $64,229 of the
         purchase price was financed from the liquidation of marketable
         securities investments, a portion of which were previously classified
         as held to maturity investments. Because of these actions, the Company
         has reclassified $101,000 of its held to maturity investments to
         available for sale investments. The effect of this change in
         classification was not significant to the Company's 2004 comprehensive
         earnings and had no effect of the Company's 2004 net earnings.



Note 8 - The Company obtained a $154,000 bank loan during the period in order to
         finance the CCI acquisition. The principal will be repaid in quarterly
         installments through August, 2006. The loan is subject to a variable
         interest rate of LIBOR plus 0.175% to 0.225% dependent upon an
         applicable margin as defined by the loan agreement. As of October 2,
         2004, the principal amount outstanding under this bank loan was
         $122,000.



Note 9 - Subsequent events:
         In October 2004, the Working Families Tax Relief Act of 2004 and the
         American Jobs Creation Act of 2004 became law. This legislation
         provides for a number of changes in tax laws. In accordance with SFAS
         No. 109, "Accounting for Income Taxes" effects of this new legislation
         will be reflected in the Company's financial statements beginning in
         the period of their enactment, October 2004. Management is presently
         reviewing this new legislation to determine the impacts on the Company
         and its operations.


         As of November 8, 2004, the outstanding principal balance of the bank
         loan referenced in Note 8 above was $92,000, a $30,000 reduction from
         October 2, 2004, reflecting the overall positive cash flows of the
         Company's business and further liquidation of marketable securities.

                                     -5E-

<PAGE>

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                 (dollars in thousands except per share amounts)
                 -----------------------------------------------


The following is management's discussion of the company's operating results and
analysis of factors which have affected the accompanying statements of earnings
and financial position.


ACQUISTION
On August 30, 2004, Tootsie Roll Industries, Inc. (Tootsie Roll) purchased
certain assets and assumed certain liabilities of Concord Confections Inc. and
its affiliates (collectively CCI) which comprise (i) Concord Confections Inc.,
the previous principal manufacturing and operating company, (ii) Terra Rouge
Estates Inc., the previous owners of the land and real estate, (iii) Alpharetta
Confections, Inc, the previous US sales and distribution company, and (iv) the
50% equity interest in the shares of Fleer Espanola, S.A. and Dr. Torrents,
S.A., a Spanish operation. The adjusted purchase price was $214,088, and
financed with the liquidation of $64,229 of marketable securities and a bank
term loan for $154,000. Under the purchase method of accounting, the total
adjusted estimated purchase price has been allocated to CCI's tangible and
intangible assets and liabilities based on their estimated fair values as of
August 30, 2004, the purchase date. The valuation of a significant portion of
assets and liabilities is still being determined, and accordingly, the purchase
price allocation reflected in the accompanying financial statements is
preliminary.


CCI holds a strong market position in the bubble gum category and its products
are sold primarily under the Dubble Bubble brand name and trademark. The
addition of CCI reinforces the Company's commitment to offer well-known consumer
brands that contribute to the success of Tootsie Roll.


NET SALES:

             Third Quarter              Third Quarter, 2004
             -------------                    vs.
           2004          2003           Third Quarter, 2003
           ----          ----           -------------------
         $156,971      $147,201             +6.6%


              Nine Months              Nine Months, 2004
              -----------                     vs.
           2004          2003          Nine Months, 2003
          -------      --------        -----------------
         $314,174      $300,496             +4.6%

                                      -6-

<PAGE>

Third quarter net sales were $156,971 compared to $147,201 in the third quarter
2003, an increase of $9,770 or 6.6%. Nine month sales were $314,174 compared to
$300,496 in the prior year corresponding period, an increase of $13,678 or 4.6%.
Net sales for the third quarter and nine month periods benefited from $10,485 of
net sales from the CCI business which was acquired on August 30, 2004.


The Company's quarterly financial reporting is based on 13 week periods ending
on the last Saturday of each period while its annual reporting is based on the
twelve months ending December 31st of the calendar year. This quarterly
reporting requires that the Company periodically reset its quarter-end dates to
maintain 13-week quarterly reporting periods during its calendar year. As a
result, the Company's nine months 2004 and 2003 reporting periods ended on
October 2, 2004 and September 27, 2003, respectively. If nine months 2004 had
ended on September 27, 2004, the Company estimates that nine months 2004 net
sales would have been approximately $4,900 less than the above reported 2004 net
sales amount. Although both third quarterly periods in 2004 and 2003 had 13
weeks, the Company's seasonal Halloween sales at the end of each quarter may
have provided some additional sales in third quarter of 2004 compared to 2003;
however, this difference is not considered practical to determine.


COST OF GOODS SOLD:
                                                Cost of Goods Sold as a
                                                -----------------------
             Third Quarter                      Percentage of Net Sales
             -------------                      -----------------------
          2004           2003                3rd Qtr. 2004    3rd Qtr. 2003
          ----           ----                -------------    -------------
        $92,167        $85,269                    58.7%           57.9%

                                              Cost of Goods Sold as a
                                              -----------------------
             Nine Months                      Percentage of Net Sales
         ----------------------               -----------------------
          2004           2003           Nine Months 2004   Nine Months 2003
         -------       --------         ----------------   ----------------
        $179,648       $170,422                   57.2%           56.7%


Cost of goods sold as a percentage of net sales increased from 57.9% in the
third quarter of 2003 to 58.7% in the third quarter of 2004. Nine month cost of
goods sold as a percentage of net sales increased from 56.7% in 2003 to 57.2% in
2004. The increase in the third quarter and nine month 2004 cost of goods sold
as a percentage of sales for the comparative reporting periods reflects the
effects of higher manufacturing labor and plant overhead costs, a portion of
which relates to a new automated line that is in its start-up phase. Although
ingredient costs in the aggregate for the comparative third quarter periods are
generally consistent, nine month 2004 costs are slightly favorable to the nine
month prior year period. Overall gross margins were affected slightly by the
inclusion of the CCI business which has a higher cost of goods sold as a
percentage of sales than do most of the Company's core brands.

                                      -6A-

<PAGE>

OPERATING EARNINGS:

             Third Quarter                    Third Quarter, 2004
             -------------                           vs.
         2004             2003                Third Quarter, 2003
         ----             ----                -------------------
       $39,681          $39,364                     +0.8%


              Nine Months                      Nine Months, 2004
              -----------                            vs.
         2004             2003                 Nine Months, 2003
        ------           ------                -----------------
       $72,560          $71,611                     +1.3%


Third quarter earnings from operations were $39,681 and $39,364 in 2004 and
2003, respectively, an increase of $317 or 0.8%. Improved third quarter 2004
earnings from operations benefited from higher reported net sales and ongoing
cost control programs. However, increased transportation and distribution
expenses, principally reflecting higher fuel costs, adversely affected third
quarter 2004 reported results. Nine months earnings from operations were $72,560
and $71,611 in 2004 and 2003, respectively, an increase of $949 or 1.3%. Nine
month performance was aided by higher sales, however, higher costs of sales and
distribution expense, as discussed above, did have an adverse effect on the 2004
results. The reported results for third quarter and nine month 2004 benefited
from the inclusion of the CCI business as of August 30, 2004.


NET EARNINGS:

             Third Quarter                    Third Quarter, 2004
             -------------                           vs.
         2004             2003                Third Quarter, 2003
         ----             ----                -------------------
       $26,976          $26,945                     +0.1%


              Nine Months                      Nine Months, 2004
              -----------                            vs.
         2004             2003                 Nine Months, 2003
        ------           ------                -----------------
       $50,297          $50,171                     +0.3%


Third quarter 2004 net earnings were $26,976 compared to third quarter 2003 net
earnings of $26,945. Third quarter 2004 earnings per share were $0.52, compared
to $.51 per share in third quarter 2003, an increase of $.01 or 2.0%. Nine
months 2004 net earnings were $50,297 compared to nine months 2003 net earnings
of $50,171. Nine months 2004 earnings per share were $.96, compared to $.94 for
the comparative 2003 period, an increase of $.02 per share or 2%. Net earnings
per share in third quarter and nine months 2004 benefited from share repurchases
which resulted in a slight reduction in average shares outstanding. However,
lower investment income and higher interest expense relating to the financing of

                                      -6B-

<PAGE>

the purchase of the CCI business adversely affected third quarter and nine
months 2004 net earnings as compared to the corresponding 2003 periods.


The consolidated effective income tax rate was 33.7% in both the third quarter
and nine months 2004 compared to 33.8% in both the third quarter and nine months
2003. This improvement generally reflects a reduction in state income taxes.


LIQUIDITY AND CAPITAL RESOURCES:


The Company's liquidity and capital resources at October 2, 2004 reflects the
purchase of the CCI business as discussed in the section entitled "Acquisition"
above. Although the Company financed a portion of the CCI acquisition with a
bank term loan of $154,000, the outstanding principal on this bank term loan
aggregated $122,000 as of October 2, 2004. As of November 8, 2004, the
outstanding principal on such term loan was $92,000, a $30,000 reduction
reflecting the Company's overall positive cash flows and the maturity and
liquidation of additional marketable securities. As of November 8, 2004, minimum
payments of outstanding principal that are required under terms of the bank loan
are $5,334 in 2005 and $86,666 in 2006.


The Company's current ratio (current assets divided by current liabilities) was
1.9 to 1 as of the end of third quarter 2004 as compared to 3.0 to 1 as of third
quarter 2003 and 3.9 to 1 as of fourth quarter 2003. Net working capital was
$108,409 as of the end of third quarter 2004 as compared to $188,412 and
$180,818 as of the end of third quarter 2003 and fourth quarter 2003,
respectively. Net working capital amounts include aggregate cash and cash
equivalents and short-term investments of $60,206 as of the end of third quarter
2004 compared to $139,310 and $171,045 as of the end of third quarter 2003 and
fourth quarter 2003, respectively. The decrease in cash and cash equivalents in
the third quarter of 2004 reflects the acquisition of the CCI business on August
30, 2004. In addition, long-term investments, principally debt securities
comprising municipal bonds, were $106,761 as of the end of third quarter 2004 as
compared to $104,591 and $112,431 as of the end of third quarter 2003 and fourth
quarter 2003, respectively.


Net cash provided by operating activities was $18,115 in nine months 2004
compared to $27,201 in nine months 2003. The net cash used in 2004 operating
activities principally reflects higher inventories and income taxes payable and
deferred, as well as the payments of split dollar insurance premiums.

                                      -6C-

<PAGE>

Capital expenditures for nine months 2004 and 2003 were $10,825 and $9,272,
respectively. Capital expenditures for the 2004 year are anticipated to be
generally in line with historical annualized spending and are to be funded from
the Company's cash flow from operations and internal sources.


Cash dividends paid in the nine months 2004 and 2003 were $11,222 and $10,803,
respectively. The Company repurchased and retired $16,407 and $28,332 of its
shares outstanding during nine months 2004 and 2003, respectively.


This discussion and certain other sections of this Form 10-Q contain
forward-looking statements that are based largely on the Company's current
expectations and are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are subject
to certain risks, trends and uncertainties that could cause actual results and
achievements to differ materially from those expressed in the forward-looking
statements. Such risks, trends and uncertainties, which in some instances are
beyond the Company's control, include changes in demand and consumer
preferences, including seasonal events such as Halloween; the effect of
ingredient costs; the effect of acquisitions and related operating results on
the Company's results of operations and financial condition; the Company's
reliance on third-party vendors for various goods and services; changes in the
confectionary market place including action taken by major retailers and
customer accounts; customer and consumer response to marketing programs and
price adjustments; changes in governmental laws and regulations including taxes;
the overall competitive environment in the Company's industry, and the
uncertainties associated with Section 404 of the Sarbanes Oxley Act with regard
to assessment of the Company's internal control over financial reporting and the
Company's ongoing compliance effort related thereto. The words "believe,"
"expect," "anticipate," "estimate," "intend" and similar expressions generally
identify forward-looking statements. Readers are cautioned not to place undue
reliance on such forward-looking statements, which are as of the date of this
filing.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK:


The Company is exposed to various market risks, including fluctuations in sugar,
corn syrup, edible oils, cocoa and packaging costs. The Company also invests in
securities with maturities of up to three years, the majority of which are held
to maturity, which limits the Company's exposure to interest rate fluctuations.
There has been no material change in the Company's market risks that would
significantly affect the disclosures made in the Form 10-K for the year ended
December 31, 2003. The Company is also exposed to exchange rate fluctuations in
the Canadian dollar which is the currency used for a portion of the operating
expenses at its Canadian plants.

                                      -6D-

<PAGE>

Item 4.    CONTROLS AND PROCEDURES

Under the supervision and with the participation of management, the chief
executive officer and chief financial officer of the Company have evaluated the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as of October 2, 2004 and, based on their evaluation, the chief
executive officer and chief financial officer have concluded that these controls
and procedures are effective. Disclosure controls and procedures are designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures are also designed to ensure that information is accumulated and
communicated to management, including the chief executive officer and chief
financial officer, as appropriate to allow timely decisions regarding required
disclosure.

There has been no change in the Company's internal control over financial
reporting that occurred during the Company's fiscal quarter ended October 2,
2004 that has materially affected, or is reasonably likely to materially affect,
the Company's internal control over financial reporting.

                                     -6E-

<PAGE>

                           PART II - OTHER INFORMATION

                          TOOTSIE ROLL INDUSTRIES, INC.
                                AND SUBSIDIARIES
                          -----------------------------


Item 2.     Unregistered Sales of Equity Securities and
            Use of Proceeds.


<TABLE>
<CAPTION>
                    (a) Total     (b) Average    (c) Total Number of Shares  (d) Maximum Number (or Approximate
                    Number of     Price Paid per    Purchased as Part of    Dollar Value) of Shares that May Yet
                      Shares         Share        Publicly Announced Plans      Be Purchased Under the Plans
Period               Purchased                         Or Programs                        Or Programs
                    -----------   -------------- ------------------------   ------------------------------------

<S>                       <C>     <C>            <C>                        <C>
JUL 4 TO JUL 31           -0-

AUG 1 TO AUG 28           -0-

AUG 29 TO OCT 2           -0-
                      -------

TOTAL                     -0-
                      =======

</TABLE>

     While the Company does not have a formal or publicly announced stock
repurchase program, the Company's board of directors periodically authorizes a
dollar amount for share repurchases. The treasurer executes share repurchase
transactions according to these guidelines.


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit 2.1  - Purchase Agreement dated August 11, 2004 among the Company,
               Concord Confections Inc. ("Concord"), certain of Concord's
               affiliates and Concord's stockholders*

Exhibit 2.2  - First Amendment to Purchase Agreement dated August 27, 2004 among
               the Company, certain of the Company's affiliates, Concord,
               certain of Concord's affiliates and Concord's stockholders*

Exhibit 10.1 - Loan Agreement dated August 27, 2004 between the Company and Bank
               of America, N.A. *

Exhibit 31.1
 and 31.2    - Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act
               of 2002.

Exhibit 32   - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*Incorporated by reference from the Company's 8-K filed on September 2, 2004

(b) Form 8-Ks

Form 8-K was filed on September 2, 2004 reporting under Items 1.01, 2.03 and
9.01 the Company's completion of an asset purchase from Concord and certain of
its affiliates and the entry by the Company into a loan agreement related to
financing for such acquisition.

Form 8-K was furnished on July 28, 2004 containing a press release announcing
earnings for the second quarter 2004.




                                   SIGNATURES
                                   ----------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                            TOOTSIE ROLL INDUSTRIES, INC.

Date:  NOV 11, 2004         BY: /s/MELVIN J GORDON
       ------------            -------------------
                               Melvin J. Gordon
                               Chairman of the Board

Date:  NOV 11, 2004         BY: /S/G HOWARD EMBER, JR.
       ------------            -----------------------
                               G. Howard Ember, Jr.
                               Vice President - Finance

                                       -7-